Keynesian analysis may have contributed to chronic federal budget deficits by
A) advocating transfer payments to redistribute income.
B) persuading the public that any given deficit could be a result of responsible policy decisions.
C) putting economists in charge of fiscal policy.
D) reducing the power of the government to finance expenditures through taxation.
B
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Refer to Table 19-2. Suppose that a simple economy produces only four goods and services: shoes, DVDs, tomatoes, and ketchup. Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households. Using the information in the above table, nominal GDP for this simple economy equals
A) $7,400. B) $6,400. C) $5,800. D) 2,440 units.
For net present value calculations, the rate of return that one could earn by investing in another project with similar risk is known as the:
A) real interest rate. B) nominal interest rate. C) prime interest rate. D) opportunity cost of capital.
Net public debt is equal to
A) the gross public debt minus current year tax revenue collection. B) the gross public debt minus taxes paid by foreign corporations on their profits made in the United States. C) the gross public debt plus all governmental interagency borrowing. D) the gross public debt minus all governmental interagency borrowing.
When the price level falls
a. households want to lend more, so the interest rate rises making the quantity of goods and services demanded rise. b. households want to lend more, so the interest rate falls, making the quantity of goods and services demanded rise. c. households want to lend more, so the interest rate rises, making the quantity of goods and services demanded fall. d. None of the above are correct.